A concerning new survey has found that many firms have “significant room for improvement” in terms of supply chain management. According to the survey, which was carried out by Grant Thornton LLP on behalf of the National Association of Manufacturers (NAM), many manufacturers are neglecting to address the potential issues in their supply chain that could emerge under the new administration.
President Trump’s election has spurred hopes of more domestic jobs, fewer regulations and lower corporate taxes, but his trade and immigration policies could hurt domestic manufactures in their endeavors abroad.
NAM Chief Economist Chad Moutray said that there is a lot of uncertainty among manufacturers at the moment, and their optimism about pro-growth policies is tempered by trade anxieties.
Of the 120 American manufacturers that were polled, 62 percent said they felt “somewhat positive” about their firm’s outlook, while only 20 percent were “very positive.” When it comes to their supply chains, however, the story is much different.
In fact, just one out of ten said they had fully implemented a strategy for optimizing supply chain performance. More than a third reported having informal supply chain processes. Seventy-eight percent of respondents said their supply chain improvement approach was geared toward managing direct costs like material, inventory, overhead, and labor. Just 17 percent were focusing on managing their indirect costs, like on-time delivery, waste, warranty, bad debt, and rework.
Future-Proofing Supply Chains
Some experts suggest embracing supply chain strategy as a way of protecting against all the political uncertainty. Being flexible is the best way to handle whatever the coming years might throw at the industry. This can be accomplished by developing a strong supply base and a disciplined process for finding the right suppliers, as well as using two regular suppliers for a particular product and having a third in the pipeline to create competition. Improving quality and service and building a strong supply base are also vital ways to ensure future success. Now is also a good time to start looking into sourcing locally.
This blog post was based off of an article from Trade Only Today. View the original here.